Cash-strapped shoppers are squeezing every inch of value out of their loyalty cards as the harsh economic headwinds continue to blow, according to Nectar, the country’s biggest loyalty card scheme.

This has led Nectar’s parent firm, Canadian-owned Aimia Coalition Loyalty UK, to take a £52.3 million hit to its revenues, as customers redeem more points than usual.

Chief financial officer Mark Grafton said: ‘The level of engagement from our customers – that is the amount of Nectar points they redeem – is at an all-time high so we have looked to increasing our provision for that by £52 million.

‘Austerity Britain means that everyone is looking for value everywhere and people are redeeming more of their points than ever before, helped by the increased level of awareness due to marketing by the brands that offer Nectar.’

With 18.5 million customers, Nectar is the biggest loyalty scheme in Britain and points can be awarded and redeemed with retailers such as Sainsbury’s, BP garages, Argos and Amazon as well as British Gas.

Launched ten years ago, Nectar receives payment when a retailer issues a Nectar point to a shopper. Nectar then compensates retailers when the points are redeemed.

It recently signed up online auction site eBay and restaurant chain Cafe Rouge. Grafton said it was looking to sign up more big brands.

According to financial accounts just filed, Aimia’s turnover for 2011 was £191.5 million after the £52.3 million cost was deducted, resulting in the company making an overall pre-tax loss of £47.9 million compared with a profit of £6.9 million the previous year.

Nectar is awaiting the results of a Supreme Court decision about its long-running battle with Revenue & Customs over whether it should pay VAT on its Nectar points. If successful, the company looks set to receive a £50 million tax refund.